Nio (NYSE:NIO) stock is slumping 5% today despite a new deal with fellow Chinese car maker GAC to establish battery swap-enabled passenger cars and battery swap stations cross-compatible between both vehicle makes.
Nio and GAC signed the strategic cooperation agreement earlier today, on May 8, in Guangzhou. GAC is headquartered in Guangzhou, China.
“The cooperation will amplify the two companies’ respective strengths in technology and operations, and push forward the unification of battery standards and operational and management systems, so as to make swapping a more approachable solution, and provide users with experiences as hassle-free as refueling,” said Nio founder and CEO William Li.
The deal will provide a level of standardization for batteries between the two car brands, intended to improve the efficiency of lifecycle battery management for both the brands’ vehicles.
By the end of May, both Nio and GAC will exchange data so that customers can find charging stations through both companies’ networks.
“Going forward, with the growing NEV population, battery swapping will unleash unlimited market opportunities, especially in cities. Because it actually solves a pain point for many users who don’t have dedicated parking spots,” said Feng Xingya, President of GAC Group. “The strategic cooperation agreement that we signed today is also a foundation and guidance for our future cooperation. With it as a starting point, we hope to build more battery swap stations with which our GAC Aion users will have a better swapping experience.”
NIO Stock Slides Despite Promising Battery Deal
While the partnership should yield significant advantages to both Nio and its customers, investors are clearly somewhat disinterested in the news.
Indeed, NIO stock is down more 5% at the time of this writing, adding to the company’s losses this year. Nio is one of several notable losers in the EV space so far in 2024, reflected by its poor stock performance. NIO is down almost 40% year-to-date (YTD).
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
